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HQ H004679

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November 7, 2007

CLA-2 OT:RR:CTF:TCM H004679 CMR

CATEGORY: CLASSIFICATION

TARIFF NO.:

U.S. Customs and Border Protection
1624 East Seventh Avenue
Suite 101
Tampa, Florida 33605
Attn: Director, Field Operations

RE: Request for Internal Advice on the eligibility of scrub pants containing foreign origin fabric belt; Internal Advice No. 07/001

Dear Ms. Crawford:

This is in response to your memorandum, dated December 18, 2006, forwarding a request for internal advice submitted by Wendt & Temples, LLC., on behalf of their client, Encompass Group, Ltd. (hereinafter Encompass), regarding the eligibility under the Caribbean Basin Trade Partnership Act (CBTPA) of certain scrub pants imported with a Canadian origin textile drawstring belt. The exceptionally well-prepared memorandum with attachments was extremely helpful in reviewing this matter. We regret our delay in responding to you.

FACTS:

The merchandise at issue consists of scrub pants which are reversible. Three sample pants were submitted; each is made of woven fabric. However, the fiber blends of the fabrics vary. Two samples are made of 65 percent polyester/35 percent cotton woven fabric; one sample is made of 50 percent polyester/50 percent cotton woven fabric. Each garment features two back pockets; one on the inside of the garment and one on the outside. The garments feature hemmed leg bottoms and tunnel waistbands through which a narrow woven fabric is threaded. The narrow woven fabric is approximately 5/8 of an inch wide and is sewn to the pants at the back. It serves as a tie-device to tighten the pants to the wearer by pulling the narrow fabric tight and tying it. Counsel for Encompass indicates that the narrow woven fabric is a 100 percent polyester woven twill tape which is manufactured in Canada of U.S. origin yarns.

The twill tape is shipped to Jamaica, where the pants are manufactured, in boxes containing 500 yards to a box. In Jamaica, the twill tape is spooled out, cut to length and tipped (by the application of heat to the cutting rod). Counsel argues that the Canadian twill tape is a finding and does not exceed 25 percent of the cost of the components of the scrub pants.

At the request of counsel for the importer, a conference call was held on October 24, 2007, with counsel and a representative of Encompass to allow for further discussion of the classification of the scrub pants with this office. A supplemental submission, dated October 31, 2007, was submitted after the meeting to summarize the main points discussed by counsel. With regard to the construction of the scrub pants at issue, counsel argued that the pants are designed with oversized waists, e.g. a waist circumference of 49 3/4 inches for a body size of 34 inches. For this reason, counsel argues that the twill tape is necessary to fit the pants to the wearer and keep the pants up. The argument is that the twill tape acts like a zipper, buttons or snaps, i.e. as a sewing essential, allowing for the "closure" and tightening of the scrub pants at the waist so that the pants may be worn.

ISSUE:

Is the Canadian origin twill tape a finding or does it disqualify the scrub pants at issue from qualifying for preferential duty treatment under the Caribbean Basin Trade Partnership Act (CBTPA)?

LAW AND ANALYSIS:

The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA. Jamaica was designated a beneficiary country by Presidential Proclamation 7351 of October 2, 2000, published in the Federal Register on October 4, 2000 (65 Federal Register 59329). It was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 2, 2000, 65 Federal Register 60236 (October 10, 2000).

The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§ 10.221 through 10.228 of the Customs Regulations (19 CFR 10.221 through 10.228).

Although we do not know which provision of the CBTPA is being utilized for entry of these goods, we understand that the importer and the port are in agreement that the goods qualify for preferential treatment under the CBTPA if the narrow fabric belt is a finding. However, the port believes the belt is not a finding, but that it is a fabric component which disqualifies the pants containing it from eligibility under the CBTPA. After a review of the file and consideration of the arguments discussed during the conference call on October 24, 2007, and summarized in the submission of October 31, 2007, we agree with the port.

Note 3, Subchapter XX, Chapter 98, provides, in pertinent part:

(a) An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains-

(i) findings or trimmings of foreign origin, if the value of such findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article; or

(b) For purposes of subdivision (a)(i) above, findings or trimmings eligible under such subdivision include sewing thread, hooks and eyes, snaps, buttons, "bow buds", decorative lace trim, elastic strips, zippers (including zipper tapes) and labels and other similar products. Elastic strips are considered findings or trimmings only if they are each less than 2.54 cm in width and used in the production of brassieres. For purposes of articles described in subheading 9820.11.06, 9820.11.18, and 9820.11.33, sewing thread shall not be considered to be findings or trimmings.

Counsel for the importer argues that the belt is a finding because of its packaging (rolled and packaged 500 yards to a box), the manner in which it is measured for use (spooled out to a specific length and cut with a hot knife or roll which seals the end), the manner in which it is used (as a closure for the pants), the fact that it is purchased by the findings and trim buyer, and its similarities to twill binding, reinforcing tapes, and bias tapes which have been found to be findings or trimmings by Customs and Border Protection (CBP) in the past.

The manner in which the belting material is packaged is not determinative of the nature of the good, i.e. whether it is fabric or a finding. Some material which is recognized as narrow fabric has been found to be a finding. See HQ 966428 of August 19, 2003 (hook and loop fastener tape found to be a finding for purposes of the African Growth and Opportunity Act (AGOA)). The fact that the material is merely cut to length is also not determinative of what the material is. Sheets are often made of material which is cut to length as it comes off the loom and no one would argue that it is not fabric material. We disagree with counsel that the belt acts as a closure much like snaps or buttons which are findings. The pants have no opening requiring a closure. The belt acts as a belt, to tighten the garment at the waist for a better fit. While the buyer of the material may be probative of what the material may be considered to be, it is not determinative; neither is its similarity in terms of width or construction to bindings or tapes previously determined to be findings or trimmings. The bindings or tapes which were the subject of the rulings cited by counsel were used as findings or trimmings in the construction of the garments at issue in those rulings. See, e.g., HQ 966640 of October 22, 2003 (narrow twill binding tape used to cover the unfinished edges of the rear neck seam and provide more comfortable wear); HQ 562139 of November 27, 2001 (white cord sewn and white satin binding around neck and sleeves provide decorative effect and binding within definition of findings, and reinforcing tape found to be a finding). Additionally, although counsel for the importer asserts that the fabric belt is of a twill weave construction, we agree with the port that the belt is not a twill or bias tape. We also agree that the belt fabric is not suitable for use as reinforcing or seam tape and note the port describes the belt's construction as a braided fabric.

The belt in this garment is a narrow fabric used as a component of the garment, that is, as a drawstring belt. CBP has issued numerous rulings on fabric belts, specifically with regard to the findings and trimmings provision of the CBTPA. See 965500 of July 5, 2002 (ruling that the drawstrings at issue were not findings under the CBTPA and that drawstrings considered to be fabric would disqualify otherwise eligible articles under the CBTPA; citing HQ 559794 of June 3, 1996 wherein CBP ruled a textile drawstring cord was not a finding and jackets incorporating the textile drawstring cord (a fabric component) would be excluded from subheading 9802.00.90, HTSUSA, treatment upon return to the United States). See also, HQ 562349 of September 12, 2003 (finding that a braided fabric belt was a fabric component and not a finding or trimming under the AGOA); HQ 966585 of September 24, 2003 (fabric drawstrings are fabric components under the AGOA); HQ 966897 of March 29, 2004 and HQ 562349 of September 12, 2003. Although some of the cited rulings are concerned with textile belts that accessorize a garment, a number of the cited rulings deal with fabric drawstrings utilized like the drawstrings at issue here. We note HQ 966639 of October 22, 2003, which held that a textile belt was not a finding or trimming under AGOA, was cited by the importer's counsel for the proposition that the drawstring belt at issue is a finding. Counsel argues it functions in the manner of buttons or zippers which are used to fasten or close garments as it serves to hold the pants up by tightening the waist to the wearer. We agree that the drawstring belt holds the pants up and enables the pants to be worn. However, belts in general may serve to either accessorize a garment or to function as a means of holding a garment on to the wearer. A belt which serves a functional purpose does not become a finding because of its functional purpose or because, as in this case, it is inserted into the waistband of the garment.

CBP's position with regard to fabric drawstrings and whether such drawstrings are findings or trimmings dates back to at least June 1996. In light of the substantial precedent, the presence of the Canadian fabric drawstring belt in the pants at issue disqualifies the garments for eligibility under the CBTPA. The drawstring is a component of the pants and together with the pants form a composite good classifiable based upon the classification of the pants. See General Rule of Interpretation 3(b) and HQ 562349, supra.

HOLDING:

The submitted scrub pants which are otherwise eligible for preferential treatment under the CBTPA are ineligible for such preferential treatment due to the presence of the Canadian origin fabric drawstring belt.

You are to mail this decision to counsel for the internal advice applicant no later than 60 days from the date of this letter. On that date Regulations and Rulings of the Office of International Trade will take steps to make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division

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See also:

• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9802.00.90 - Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, etc.
• Tariff No.: 9820.11.06 - CBTPA goods: Apparel articles cut in one or more CBTPA from US formed fabric of US formed yarn assembed in CBTPA with US yarn
• Tariff No.: 9820.11.18 - CBTPA goods: Knitted or crocheted apparel, cut and assembled in one or more CBTPA from US fabric of US yarn if assembly with US thread
• Tariff No.: 9820.11.33 - CBTPA goods: Apparel articles sewn/assembled in CBTPA country with US thread & any combination of certain cutting or knit-to-shape operation